LOYALTY PROGRAMS HOMEPAGE

How can loyalty marketing help my company?

Loyalty marketing helps you retain customers – which helps you increase profits. The typical U.S. corporation loses almost half its customer base every five years. Companies that understand the impact of this customer attrition and take steps to stem losses can realize dramatic profit gains. In fact, according to Frederick Reichheld in The Loyalty Effect, a 5% improvement in a company’s customer attrition rate can push that company’s profits up to 75% higher.

Increased profits result from reduced acquisition costs, increased cross-selling, a high customer referral rate, decreased price sensitivity, and lower operating costs. 

Loyalty marketing helps you understand the potential of the customer base you already have. On average, the cost of acquiring a new customer is five to 10 times greater than the cost of retaining a current customer. Do you know what share of your current customers’ business your company has today? It’s not uncommon for very successful companies to have less than 50% of their current customers’ business. 

For example: Company A has $1 million in revenue, and its management team knows that the company has exactly 50% of its current customers’ business. Therefore, the team also knows that 1% of its customers’ business is worth $20,000. Armed with that knowledge, the team can make better marketing decisions and work to maximize the potential of its customer base. 

Companies that are on the cutting edge of loyalty programs reap lasting benefits. Being the first in your business category to launch a loyalty program pays real dividends. Our experience has shown time after time that customer behavior is formed very early on in a category’s loyalty program development. This means that once a particular company has established a loyalty program in its category, other companies in the same category have to make a much greater investment (often two or three times more) to equal the impact of an early entry. The first company has the advantage in customer retention — and latecomers into mature loyalty environments have little hope of gaining incremental business, or spend a great deal trying to make inroads. Either way, being the first in is an advantage. 

Customer loyalty is different from customer satisfaction. Between 65% and 85% of customers who defect report that they were satisfied or very satisfied with the companies from which they removed their business. The Eastbiz Net can work with you to help you create strategies that allow you to retain high levels of customer service and achieve high levels of customer loyalty. The Eastbiz Net can help you do all of the above — and then some. Get in touch with us to start a dialogue with your customers.